(THE BRANDYWINE FUNDS LOGO)
MANAGED BY FRIESS ASSOCIATES, INC.
QUARTERLY REPORT
JUNE 30, 2000
DEAR FELLOW SHAREHOLDERS:
Brandywine and Brandywine Blue enter the final quarter of your fiscal year
ending September 30 with very nice distances over the key indexes. The Funds are
up 48.3 and 41.1 percent versus gains in the S&P 500, Russell 2000, S&P MidCap
and Nasdaq Industrials of 14.4, 21.1, 26.6 and 30.9 percent.
FISCAL YEAR TO DATE
S&P 500 14.4%
RUSSELL 2000 21.1%
S&P MIDCAP 26.6%
NASDAQ IND. 30.9%
BRANDYWINE BLUE 41.1%
BRANDYWINE FUND 48.3%
These results are achieved not only when the sun is shining, but also during bad
markets like the environment in the recently completed June quarter when the
Nasdaq Industrials dropped 13.0 percent. The Fund retracements were contained at
5.2 and 8.4 percent. The S&P 500 dropped 2.7 percent. The Goldman Sachs Internet
Index fell 32.1 percent.
Morningstar wrote, "Brandywine's focus on picking successful companies with
dynamic fundamentals . . . has served shareholders well during the recent tech
rout." And TheStreet.com noted, "The fund . . . didn't get crushed by the dot-
coms and they didn't get lured into buying the wrong tech, the stuff that has
crashed to earth so infamously in the last few weeks."
We're especially encouraged by your 12.0 and 7.4 percent gains so far this
calendar year considering that 52 percent of the 6,464 U.S. stock funds
Bloomberg tracks declined in the same period. The S&P 500 and Nasdaq Industrials
--------
are down 0.5 and 5.9 percent.
TWELVE MONTHS THROUGH JUNE 30
S&P 500 7.2%
RUSSELL 2000 13.0%
S&P MIDCAP 15.6%
NASDAQ IND. 29.2%
BRANDYWINE BLUE 40.6%
BRANDYWINE FUND 50.4%
Twelve-month increases of 50.4 for Brandywine and 40.6 percent for Brandywine
Blue surpass gains in the S&P 500, Russell 2000, S&P MidCap and Nasdaq
Industrials of 7.2, 13.0, 15.6 and 29.2 percent.
BRANDYWINE BRANDYWINE BLUE
CUMULATIVE % CHANGE % CHANGE
--------------------- ---------- ---------------
QUARTER -5.2 -8.4
ONE YEAR 50.4 40.6
FIVE YEARS 156.1 145.1
TEN YEARS 484.1 N/A
INCEPTION 1190.0*<F1> 536.9**<F2>
ANNUALIZED
----------
FIVE YEARS 20.7 19.6
TEN YEARS 19.3 N/A
INCEPTION 19.3*<F1> 21.6**<F2>
*<F1> 12/30/85
**<F2> 1/10/91
We're excited that Andrea Dalton, Linda Farquhar and David Marky joined your
team. Andrea, a Columbia Business School Graduate, brings five years of
experience to your research team, including a stint with Mario Gabelli. Linda, a
University of Pennsylvania Wharton School alumna, spent eight years researching
investments at a $2 billion hedge fund and BT Alex Brown. David adds to your
management team his 14 years experience with PFPC Global Fund Services, the
nation's second-largest custodial bank. Meanwhile, Jack Fraser and David
Harrington pursue their entrepreneurial dreams and join a start-up firm
embracing private-equity and hedge-fund investments.
We welcome two new high-powered additions to your network of external
consultants. John Bolger, the former chief financial officer of Cisco Systems,
offers his vast knowledge of the semiconductor industry and other technology
areas. In addition to being chairman of the TCSI Corp. board, John serves on the
boards of Wind River Systems, Sanmina, Integrated Systems and Integrated Device
Technology.
Phil Mallott, who served as chief financial officer for Intimate Brands for the
past five of his 16 years as an executive in the retail business, becomes a key
resource for retail holdings and accounting issues. Phil serves on the board of
Too Inc., The Limited's youth apparel unit.
You might notice more energy stocks in your portfolio this quarter. Your team
identified significant earnings strength among oil and gas companies in various
sectors of the business thanks to increasing pricing trends, one of which should
be obvious to you at the gas pump. Natural gas prices are also through the roof
when compared with year-ago levels. Power generation facilities increasingly use
natural gas to generate electricity to meet demand during the hot summer months.
To give you an idea, in the March quarter one of your holdings, Devon Energy,
got 135 percent more from customers for a barrel of oil than a year ago, 49
percent more for a thousand cubic feet of natural gas and 141 percent more for a
barrel of natural gas liquid. The company boosted capacity as prices climbed,
enabling it to grow earnings to $0.67 a share from $0.12.
The semiconductor sector, a source of many of your recent winners, experiences
greater volatility due to concerns about the cell phone market's ability to
continue at its astounding pace as demand becomes more weighted toward lower-end
products. After a six-fold increase in the past two years, the Philadelphia
Stock Exchange Semiconductor Index dropped 15 percent in May, jumped 14 percent
in June, then rose 3.6 percent and fell 9.3 percent in the first two trading
days of July.
Uncertainty and volatility remain, and make your team's in-depth research much
more important.
Volatility creates opportunity, as dramatic investor reactions to bits of news
often occur without regard to fundamentals. For example, oil company stocks fell
6.6 percent July 5 when Saudi Arabia announced its intention to produce another
500,000 barrels of oil a day to bring down prices. While the market reaction was
sharp, a material change to oil prices would likely require cooperation among
other OPEC nations and so far that's not there. Also, even if prices hit Saudi
Arabia's lower target, they would still be substantially higher than a year ago.
Your team welcomes these occasional swings, as they create opportunities to pick
up solid stocks that investors abandon on gut reactions only to return to them
later when it's clearer that their fundamentals remain intact.
As I write this, memories of Fourth of July fireworks and celebrations are still
fresh from earlier this week, reminding me how fortunate we all are to live in
America. We owe a huge thanks to all those who made sacrifices to make this
great nation and its amazing free-enterprise system possible. Paying taxes is
one of the small prices we pay for living in this country. Paying taxes means
you're making money. A four-fold increase in Peregrine Systems, a five-fold
increase in Nokia and a six-fold increase in Gemstar allow Uncle Sam to get his
piece, too.
We're grateful for the opportunity to serve you. All my personal stock-market
investments are in the Brandywine Funds, and your entire team is invested
alongside you through the Friess Associates pension plan and personal
investments. We're committed to the same time-tested disciplines that first
attracted you to us, and we look forward to employing them on your behalf for
many years to come.
God Bless!
/s/ Foster Friess
Foster Friess
July 6, 2000
Attention IRA Shareholders . . .
We continue to strive to keep Fund fees as low as possible and, as part of that
commitment, we remind all IRA shareholders that your annual $12.50 maintenance
fee is due September 20, 2000.
By nature, IRA accounts require additional time, paperwork and government
reporting, which create added costs for our custodial bank, Firstar. We applaud
the long-term investment focus of shareholders who chose to invest in the
Brandywine Funds through tax-advantaged accounts, and are glad to be able to
keep the IRA-related costs low and not pass them on to non-IRA shareholders.
For your convenience, Firstar will automatically deduct this amount from your
account or, if you prefer, you can send Firstar a check for payment by September
20. For shareholders with multiple IRA accounts, the maximum charge is $25 per
Social Security number.
BRANDYWINE FUND
PERCENT CHANGE IN TOP TEN HOLDINGS FROM BOOK COST
1. Advanced Micro Devices, Inc. +154.0
2. Tyco International Ltd. +25.7
3. Tellabs, Inc. +23.1
4. LSI Logic Corp. +140.0
5. National Semiconductor Corp. +48.0
6. Atmel Corp. +80.9
7. RadioShack Corp. -3.2
8. Nortel Networks Corp. +252.4
9. Apple Computer, Inc. +113.7
10. Flextronics International Ltd. +19.8
EARNINGS GROWTH
YOUR COMPANIES 30%
S&P 500 9%
FORECASTED INCREASE IN EARNINGS PER SHARE
2001 VS 2000
ALL FIGURES ARE DOLLAR WEIGHTED AND BASED ON DATA FROM BASELINE. JUNE 30, 2000.
YOUR COMPANIES' MARKET CAPITALIZATION
LARGE CAP
$9 billion and over
40.0%
MID CAP
$2 billion to $9 billion
39.7%
SMALL CAP
below $2 billion
15.0%
CASH
5.3%
TOP TEN INDUSTRY GROUPS
Semiconductor Manufacturing (13.9%)
Electronics (10.3%)
Semiconductor Related (9.3%)
Oil/Gas Field Services (9.1%)
Oil/Gas Exploration & Production (8.2%)
Communications Equipment (7.3%)
Machinery & Miscellaneous Manufacturing (6.6%)
Computer Related (5.9%)
Medical Related (5.5%)
Specialty Retailing (5.3%)
All Others (13.3%)
Cash (5.3%)
BRANDYWINE FUND
JUNE QUARTER "ROSES AND THORNS"
BIGGEST $ $ GAIN
WINNERS (IN MILLIONS) % GAIN REASON FOR MOVE
------- ------------- ------ ---------------
Advanced Micro
Devices, Inc. $114.1 36.5 Wall Street analysts more than
doubled 2000 earnings estimates to
$5.11 from $2.21 as demand surged for
the company's computer and flash
memory chips amid tight industry
supply. March-quarter earnings per
share jumped to $1.13 from a $1.10
loss a year ago, beating consensus
earnings estimates by 102 percent.
Tellabs, Inc. $49.1 23.1 After matching year-ago earnings
results in the March quarter, the
communications equipment maker is
poised to generate 36 percent growth
over the next 12 months. A new
product cycle scheduled to begin in
the second half of 2000 will help
providers manage the explosive growth
of voice, data and video traveling
over their networks.
NVIDIA Corp. $32.8 54.7 Microsoft's use of the company's
input/output processors and high-
performance three-dimensional
graphics processors in the Microsoft
X-box video game console next year
shows Nvidia's broadening reach
beyond the desktop PC market. April-
quarter earnings grew 174 percent on
revenues of $148 million, more than
double a year ago.
Integrated Device
Technology, Inc. $30.3 51.1 Strong demand for the company's
communications chips helped it beat
expectations by 21 percent in the
March quarter. Integrated Device
earned $0.41 a share versus $0.05 a
year ago.
Sanmina Corp. $23.7 26.9 March-quarter earnings grew 187
percent. The company's strategic
acquisition of circuit manufacturer
Hadco resulted in new printed
circuit-board fabrication capacity,
an increased customer base and a
strengthened management team.
BIGGEST $ $ LOSS
LOSERS (IN MILLIONS) % LOSS REASON FOR MOVE
------- ------------- ------ ---------------
Motorola, Inc. $87.7 -38.7 The company beat March-quarter
expectations as strong demand for its
wireless network equipment drove 111
percent earnings growth, but Motorola
warned June-quarter earnings would
fall short of forecasts amid lower
phone prices and higher costs for
parts.
LSI Logic Corp. $76.8 -25.5 Profit taking following a substantial
run-up caused the stock to retrace.
Strong demand for LSI's application-
specific integrated circuits, used in
broadband, data networking, wireless
and set-top box applications, helped
the company earn $0.26 per share
versus $0.04 a year ago.
Atmel Corp. $75.0 -28.5 Despite topping estimates, the stock
fell on capacity concerns as demand
for Atmel's flash memory outstripped
supply. Earnings jumped 375 percent
to $0.19 in the March quarter, and
analysts forecast 238 percent growth
for the June quarter.
Apple
Computer, Inc. $58.9 -19.6 Stock fell due to a cyclical June-
quarter slowdown in consumer
purchases of personal computers.
However, anticipation is building as
the July Macintosh World Trade Show
nears, which marks a potential new
product cycle for Apple. March-
quarter earnings grew 47 percent,
beating consensus estimates by 7
percent.
Parametric
Technology Corp. $56.9 -51.8 Total revenues were revised downward
by 15 percent. The company's sales
force failed to close several large
deals for its Windchill software,
which links designers and engineers
with manufacturing departments,
suppliers and customers over the
Internet.
All gains/losses are calculated on an average cost basis
BRANDYWINE FUND, INC.
STATEMENT OF NET ASSETS
June 30, 2000
(Unaudited)
QUOTED
MARKET
SHARES COST VALUE (B)<F4>
------ ---- -------------
COMMON STOCKS - 94.7% (A)<F3>
APPAREL & SHOE RETAILERS - 1.9%
1,000,000 AnnTaylor Stores Corp. $ 30,417,991 $ 33,125,000
100,000 Braun's Fashions Corp. 1,356,611 3,668,750
234,700 Footstar, Inc. 8,715,678 7,803,775
249,200 Guess o, Inc. 4,240,018 3,488,800
2,758,000 Intimate Brands, Inc. 58,273,650 54,470,500
347,100 Kenneth Cole Productions, Inc. 12,143,269 13,884,000
85,000 Skechers U.S.A., Inc. 1,163,498 1,344,062
194,500 Vans, Inc. 2,130,830 2,844,563
------------ ------------
118,441,545 120,629,450
THIS SECTOR IS 1.8% ABOVE YOUR FUND'S COST.
BUILDING RELATED - 0.2%
350,000 Insituform Technologies, Inc. 11,097,844 9,493,750
THIS SECTOR IS 14.5% BELOW YOUR FUND'S COST.
COMMUNICATIONS EQUIPMENT - 7.3%
2,719,900 Nortel Networks Corp. 52,671,464 185,633,175
250,000 Scientific-Atlanta, Inc. 17,990,425 18,625,000
3,824,300 Tellabs, Inc. 212,590,796 261,725,531
------------ ------------
283,252,685 465,983,706
THIS SECTOR IS 64.5% ABOVE YOUR FUND'S COST.
COMMUNICATIONS SERVICES - 0.6%
412,700 Ditech Communications Corp. 39,403,805 39,025,944
THIS SECTOR IS 1.0% BELOW YOUR FUND'S COST.
COMPUTER RELATED - 5.9%
2,940,600 Apple Computer, Inc. 72,079,776 154,013,925
4,198,800 Compaq Computer Corp. 124,628,489 107,331,825
65,000 Manhattan Associates, Inc. 1,608,242 1,625,000
160,000 Media 100 Inc. 3,803,540 4,120,000
1,403,700 Microchip Technology, Inc. 43,147,475 81,787,423
650,000 Robotic Vision Systems, Inc. 10,107,016 11,700,000
235,000 Zoran Corp. 10,309,482 15,495,312
------------ ------------
265,684,020 376,073,485
THIS SECTOR IS 41.5% ABOVE YOUR FUND'S COST.
ELECTRONICS - 10.3%
340,000 ACT Manufacturing, Inc. 9,227,041 15,788,750
79,200 Amkor Technology, Inc. 1,733,340 2,796,750
1,130,100 Amphenol Corp. 59,739,565 74,798,494
250,500 Applied Films Corp. 5,337,958 9,174,562
272,000 Applied Science and
Technology, Inc. 9,157,675 7,038,000
70,000 August Technology Corp. 897,708 1,150,625
439,200 C&D Technologies, Inc. 17,612,954 24,814,800
1,030,100 Celestica Inc. 49,240,457 51,118,712
250,000 Electro Scientific
Industries, Inc. 13,094,368 11,007,800
2,007,700 Flextronics International Ltd. 115,088,216 137,903,894
804,800 KEMET Corp. 13,318,473 20,170,300
300,000 Mettler-Toledo International Inc. 9,834,479 12,000,000
641,775 Molex Inc. 20,617,232 22,462,125
20,000 Richardson Electronics, Ltd. 332,394 321,250
1,308,000 Sanmina Corp. 77,945,693 111,834,000
1,543,700 SCG Holding Corp. 29,209,522 33,768,438
753,500 Taiwan Semiconductor
Manufacturing Company Ltd. 27,272,973 29,245,219
1,060,000 Tektronix, Inc. 70,645,697 78,440,000
660,000 Viasystems Group, Inc. 11,198,787 10,683,750
------------ ------------
541,504,532 654,517,469
THIS SECTOR IS 20.9% ABOVE YOUR FUND'S COST.
FINANCIAL/BUSINESS SERVICES - 2.8%
1,644,200 Acxiom Corp. 47,176,707 44,804,450
566,000 AmeriCredit Corp. 7,885,019 9,622,000
90,000 Carreker Corp. 994,896 810,000
380,800 Concord EFS, Inc. 10,118,737 9,900,800
530,000 First Health Group Corp. 16,342,317 17,390,625
200,000 Hall, Kinion & Associates, Inc. 4,284,687 6,662,500
96,900 NCO Group, Inc. 2,752,194 2,240,812
991,400 Providian Financial Corp. 73,501,806 89,226,000
------------ ------------
163,056,363 180,657,187
THIS SECTOR IS 10.8% ABOVE YOUR FUND'S COST.
FOOD/RESTAURANTS - 2.0%
944,200 Brinker International, Inc. 24,915,384 27,617,850
180,000 Buca, Inc. 2,233,340 2,812,500
1,130,000 Darden Restaurants, Inc. 20,955,936 18,362,500
1,087,000 Outback Steakhouse, Inc. 31,816,811 31,794,750
215,000 RARE Hospitality
International, Inc. 6,337,446 6,073,750
665,600 Ruby Tuesday, Inc. 6,374,499 8,361,600
100,000 Sonic Corp. 3,095,790 2,937,500
1,726,500 Wendy's International, Inc. 30,630,154 30,753,281
------------ ------------
126,359,360 128,713,731
THIS SECTOR IS 1.9% ABOVE YOUR FUND'S COST.
LEISURE & ENTERTAINMENT - 1.7%
401,300 Four Seasons Hotels Inc. 20,040,717 24,955,844
203,000 Meade Instruments Corp. 5,858,506 5,100,375
2,359,700 Starwood Hotels & Resorts
Worldwide, Inc. 66,247,759 76,837,731
------------ ------------
92,146,982 106,893,950
THIS SECTOR IS 16.0% ABOVE YOUR FUND'S COST.
MACHINERY & MISCELLANEOUS MANUFACTURING - 6.6%
225,000 Advanced Energy Industries, Inc. 13,596,478 13,260,937
2,525,000 Dover Corp. 119,284,202 102,420,313
235,700 Lone Star Technologies, Inc. 11,403,107 10,901,125
300,000 Maverick Tube Corp. 8,344,030 8,737,500
300,000 NS Group, Inc. 4,449,612 6,281,250
105,000 Oshkosh Truck Corp. 3,264,969 3,753,750
5,792,100 Tyco International Ltd. 218,328,597 274,400,738
------------ ------------
378,670,995 419,755,613
THIS SECTOR IS 10.8% ABOVE YOUR FUND'S COST.
MEDICAL RELATED - 5.5%
210,500 ADAC Laboratories 3,069,566 5,052,000
115,000 Bindley Western Industries, Inc. 2,906,023 3,040,312
64,300 Community Health Systems, Inc. 835,900 1,040,856
321,400 The Cooper Companies, Inc. 11,807,549 11,690,925
175,000 Coventry Health Care, Inc. 2,202,175 2,332,417
50,000 Diagnostic Products Corp. 1,588,423 1,600,000
10,000 DIANON Systems, Inc. 230,000 252,500
444,500 Enzon, Inc. 18,929,114 18,891,250
164,800 IDEXX Laboratories, Inc. 4,358,226 3,769,800
263,200 Laboratory Corporation
of America Holdings 19,525,647 20,299,300
939,300 Orthodontic Centers
of America, Inc. 24,002,181 21,251,663
75,000 Owens & Minor, Inc. 1,192,912 1,289,062
178,000 Professional Detailing, Inc. 4,926,870 6,063,125
1,659,300 St. Jude Medical, Inc. 68,178,512 76,120,388
700,000 Trigon Healthcare, Inc. 34,113,174 36,093,750
1,453,500 UnitedHealth Group Inc. 107,811,069 124,637,625
443,200 Varian Medical Systems, Inc. 18,827,102 17,340,200
------------ ------------
324,504,443 350,765,173
THIS SECTOR IS 8.1% ABOVE YOUR FUND'S COST.
NETWORKING - 0.2%
550,000 Network Associates, Inc. 18,119,270 11,206,250
THIS SECTOR IS 38.2% BELOW YOUR FUND'S COST.
OIL/GAS EXPLORATION & PRODUCTION - 8.2%
1,720,200 Apache Corp. 80,759,642 101,169,262
300,000 Barrett Resources Corp. 10,806,880 9,131,250
250,000 Comstock Resources, Inc. 1,923,360 2,000,000
1,100,000 Devon Energy Corp. 50,961,817 61,806,250
542,000 Dynegy Inc. 17,618,230 37,025,375
1,400,000 El Paso Energy Corp. 60,717,458 71,312,500
788,700 EOG Resources, Inc. 18,339,142 26,421,450
225,000 Equitable Resources, Inc. 11,108,988 10,856,250
1,173,700 Kerr-McGee Corp. 70,207,666 69,174,944
200,000 Tom Brown, Inc. 4,148,905 4,612,500
1,033,400 Triton Energy Ltd. 35,370,340 40,625,538
3,800,000 Union Pacific Resources Group Inc. 78,570,398 83,600,000
------------ ------------
440,532,826 517,735,319
THIS SECTOR IS 17.5% ABOVE YOUR FUND'S COST.
OIL/GAS FIELD SERVICES - 9.1%
1,690,000 ENSCO International Inc. 61,058,771 60,523,125
2,700,000 Grant Prideco, Inc. 53,387,487 67,500,000
688,000 Helmerich & Payne, Inc. 23,844,089 25,714,000
1,826,900 Key Energy Services, Inc. 19,973,636 17,583,913
953,200 Marine Drilling Companies, Inc. 24,886,429 26,689,600
810,600 Precision Drilling Corp. 25,232,464 31,309,425
1,154,600 Pride International, Inc. 26,402,849 28,576,350
3,528,800 R&B Falcon Corp. 83,041,164 83,147,350
1,965,000 Rowan Companies, Inc. 58,189,077 59,686,875
700,000 Santa Fe International Corp. 24,865,159 24,456,250
21,700 TMBR/Sharp Drilling, Inc. 266,181 238,700
1,840,000 Transocean Sedco Forex, Inc. 96,936,463 98,325,000
1,350,000 Weatherford International, Inc. 53,526,525 53,746,875
------------ ------------
551,610,294 577,497,463
THIS SECTOR IS 4.7% ABOVE YOUR FUND'S COST.
PHARMACEUTICALS - 0.7%
1,560,000 ICN Pharmaceuticals, Inc. 45,129,038 43,387,500
113,200 K-V Pharmaceutical Co. 2,241,465 2,999,800
------------ ------------
47,370,503 46,387,300
THIS SECTOR IS 2.1% BELOW YOUR FUND'S COST.
SEMICONDUCTOR MANUFACTURING - 13.9%
4,857,300 Advanced Micro Devices, Inc. 147,747,148 375,226,425
1,364,400 Cypress Semiconductor Corp. 31,419,062 57,645,900
47,100 Diodes Inc. 1,563,104 2,019,412
1,758,800 Fairchild Semiconductor Corp. 48,212,864 71,231,400
430,000 Galileo Technology Ltd. 8,092,951 9,245,000
1,495,900 Integrated Device Technology, Inc. 26,184,848 89,567,012
692,700 Lattice Semiconductor Corp. 32,387,205 47,882,888
115,000 Microsemi Corp. 2,771,957 3,902,813
3,900,000 National Semiconductor Corp. 149,505,786 221,325,000
62,000 Supertex, Inc. 1,968,040 3,115,500
------------ ------------
449,852,965 881,161,350
THIS SECTOR IS 95.9% ABOVE YOUR FUND'S COST.
SEMICONDUCTOR RELATED - 9.3%
245,000 ASM International N.V. 7,702,991 6,492,500
5,101,200 Atmel Corp. 103,966,011 188,106,750
315,000 Cohu, Inc. 12,125,508 8,495,140
601,600 Dallas Semiconductor Corp. 20,534,520 24,515,200
140,000 FEI Co. 3,494,646 4,270,000
120,000 Helix Technology Corp. 4,413,160 4,680,000
290,000 Intersil Holding Corp. 12,042,783 15,678,125
1,000,000 Lam Research Corp. 45,559,715 37,500,000
4,149,600 LSI Logic Corp. 93,586,905 224,597,100
407,300 LTX Corp. 5,830,469 14,230,044
178,000 Photronics, Inc. 5,849,008 5,050,750
35,500 Rudolph Technologies, Inc. 1,217,188 1,375,625
246,000 Semitool, Inc. 4,614,646 4,258,875
306,600 Therma-Wave Inc. 10,627,028 6,841,013
250,000 Varian Semiconductor Equipment
Associates, Inc. 13,192,134 15,703,125
382,000 Veeco Instruments Inc. 18,982,491 27,981,500
------------ ------------
363,739,203 589,775,747
THIS SECTOR IS 62.1% ABOVE YOUR FUND'S COST.
SOFTWARE - 2.6%
160,000 AremisSoft Corp. 4,388,140 4,980,000
400,000 BindView Development Corp. 2,943,053 4,800,000
390,000 Brio Technology, Inc. 11,027,097 8,263,125
336,400 Cognos Inc. 5,062,122 13,918,550
322,800 Dendrite International, Inc. 7,077,281 10,753,275
870,000 FileNet Corp. 14,380,145 15,986,250
65,000 Group 1 Software, Inc. 1,363,019 1,121,250
249,600 JDA Software Group, Inc. 4,446,128 4,789,200
100,000 Manugistics Group, Inc. 3,441,850 4,675,000
135,000 MSC.Software Corp. 1,285,503 1,257,187
873,800 NVIDIA Corp. 17,781,447 55,540,913
970,000 Pinnacle Systems, Inc. 20,157,460 21,809,771
500,000 Sybase, Inc. 10,259,622 11,500,000
125,000 Ulticom, Inc. 2,174,135 3,001,950
100,000 The Ultimate Software Group, Inc. 1,059,586 912,500
------------ ------------
106,846,588 163,308,971
THIS SECTOR IS 52.8% ABOVE YOUR FUND'S COST.
SPECIALTY RETAILING - 5.3%
1,750,000 BJ's Wholesale Club, Inc. 53,072,125 57,750,000
410,000 Fleming Companies, Inc. 5,840,628 5,355,625
1,690,000 Ingram Micro Inc. 31,879,982 29,469,375
605,000 InterTAN, Inc. 9,656,798 7,108,750
432,100 Michaels Stores, Inc. 18,071,887 19,795,581
3,965,600 RadioShack Corp. 194,029,516 187,870,300
165,000 Rent-Way, Inc. 4,071,784 4,815,938
622,100 Tech Data Corp. 18,816,210 27,100,231
------------ ------------
335,438,930 339,265,800
THIS SECTOR IS 1.1% ABOVE YOUR FUND'S COST.
TRANSPORTATION RELATED - 0.4%
250,000 Atlantic Coast Airlines
Holdings, Inc. 6,846,113 7,937,500
425,000 Atlas Air, Inc. 15,025,830 15,246,875
------------ ------------
21,871,943 23,184,375
THIS SECTOR IS 6.0% ABOVE YOUR FUND'S COST.
MISCELLANEOUS - 0.2%
150,000 Buckeye Technologies Inc. 2,931,081 3,290,625
40,000 Bush Industries, Inc. 552,820 640,000
25,000 Capstone Turbine Corp. 400,000 1,126,563
84,200 Measurement Specialties, Inc. 2,100,778 3,231,175
70,000 Stericycle, Inc. 1,624,342 1,680,000
------------ ------------
7,609,021 9,968,363
THIS SECTOR IS 31.0% ABOVE YOUR FUND'S COST.
------------- -------------
Total common stocks 4,687,114,117 6,012,000,396
SHORT-TERM INVESTMENTS - 4.3% (A)<F3>
COMMERCIAL PAPER - 4.1%
$20,000,000 American General Finance ECN,
due 07/03/00, discount of 6.98% 19,992,244 19,992,244
35,000,000 Citicorp, due 07/05/00,
discount of 6.72% 34,973,867 34,973,867
15,000,000 Household International,
due 07/05/00, discount of 6.90% 14,988,500 14,988,500
25,000,000 American General Finance ECN,
due 07/06/00, discount of 6.60% 24,977,083 24,977,083
25,000,000 Goldman Sachs Group LP,
due 07/06/00, discount of 6.75% 24,976,563 24,976,563
25,000,000 Ford Credit,
due 07/07/00, discount of 6.56% 24,972,667 24,972,667
25,000,000 Goldman Sachs Group LP,
due 07/07/00, discount of 6.75% 24,971,875 24,971,875
5,000,000 American General Finance ECN,
due 07/10/00, discount of 6.75% 4,991,562 4,991,562
25,000,000 FPL Group Capital,
due 07/10/00, discount of 6.56% 24,959,000 24,959,000
15,000,000 Household International,
due 07/10/00, discount of 6.58% 14,975,325 14,975,325
20,000,000 General Motors Acceptance Corp.,
due 07/11/00, discount of 6.62% 19,963,222 19,963,222
25,000,000 US West Communications,
due 07/12/00, discount of 6.63% 24,949,354 24,949,354
------------- -------------
Total commercial paper 259,691,262 259,691,262
VARIABLE RATE DEMAND NOTE - 0.2%
11,973,430 Firstar Bank U.S.A., N.A. 11,973,430 11,973,430
-------------- --------------
Total short-term investments 271,664,692 271,664,692
-------------- --------------
Total investments $4,958,778,809 6,283,665,088
--------------
--------------
Cash and receivables, less
liabilities 1.0% (A)<F3> 65,047,752
--------------
NET ASSETS $6,348,712,840
--------------
--------------
Net Asset Value Per Share
($0.01 par Value 500,000,000
shares authorized), offering
and redemption price
($6,348,712,840 / 132,212,977
shares outstanding) $48.02
------
------
(a)<F3> Percentages for the various classifications relate to net assets.
(b)<F4> Each security, excluding short-term investments, is valued at the last
sale price reported by the principal security exchange on which the
issue is traded, or if no sale is reported, the latest bid price.
Securities which are traded over-the-counter are valued at the latest
bid price. Short-term investments are valued at amortized cost which
approximates quoted market value.
If you have not yet shared your e-mail address with us and would like to do so,
please send it to us at [email protected].
BRANDYWINE BLUE FUND
PERCENT CHANGE IN TOP TEN HOLDINGS FROM BOOK COST
1. Advanced Micro Devices, Inc. +154.0
2. Tyco International Ltd. +23.8
3. Tellabs, Inc. +26.9
4. Atmel Corp. +118.2
5. National Semiconductor Corp. +56.7
6. LSI Logic Corp. +143.4
7. RadioShack Corp. -4.4
8. Nortel Networks Corp. +317.2
9. Flextronics International Ltd. +21.8
10. Apple Computer, Inc. +117.8
EARNINGS GROWTH
YOUR COMPANIES 28%
S&P 500 9%
FORECASTED INCREASE IN EARNINGS PER SHARE
2001 VS 2000
ALL FIGURES ARE DOLLAR WEIGHTED AND BASED ON DATA FROM BASELINE. JUNE 30, 2000.
YOUR COMPANIES' MARKET CAPITALIZATION
LARGE CAP
$9 billion and over
43.0%
MID CAP
$2 billion to $9 billion
52.8%
CASH
4.2%
BRANDYWINE BLUE OWNED NO COMPANIES BELOW $2 BILLION MARKET CAP.
TOP TEN INDUSTRY GROUPS
Semiconductor Manufacturing (14.7%)
Electronics (12.0%)
Oil/Gas Exploration & Production (10.1%)
Semiconductor Related (10.1%)
Oil/Gas Field Services (9.1%)
Communications Equipment (7.9%)
Machinery & Miscellaneous Manufacturing (6.7%)
Specialty Retailing (6.1%)
Computer Related (5.9%)
Medical Related (3.4%)
All Others (9.8%)
Cash (4.2%)
BRANDYWINE BLUE FUND
JUNE QUARTER "ROSES AND THORNS"
BIGGEST $ $ GAIN
WINNERS (IN MILLIONS) % GAIN REASON FOR MOVE
------- ------------- ------ ---------------
Advanced Micro
Devices, Inc. $8.7 37.2 Wall Street analysts more than
doubled 2000 earnings estimates to
$5.11 from $2.21 as demand surged for
the company's computer and flash
memory chips amid tight industry
supply. March-quarter earnings per
share jumped to $1.13 from a $1.10
loss a year ago, beating consensus
earnings estimates by 102 percent.
Tellabs, Inc. $4.4 26.9 After matching year-ago earnings
results in the March quarter, the
communications equipment maker is
poised to generate 36 percent growth
over the next 12 months. A new
product cycle scheduled to begin in
the second half of 2000 will help
providers manage the explosive growth
of voice, data and video traveling
over their networks.
Flextronics
International, Ltd. $2.2 21.8 The company won a five-year, $30
billion contract to make some of
Motorola's wireless phones, pagers
and wireless infrastructure products,
representing the largest electronics
manufacturing alliance ever. March-
quarter earnings increased 82 percent
on revenue growth of 273 percent.
Sanmina Corp. $1.9 28.3 March-quarter earnings grew 187
percent. The company's strategic
acquisition of circuit manufacturer
Hadco resulted in new printed
circuit-board fabrication capacity,
an increased customer base and a
strengthened management team.
Apache Corp. $1.7 23.1 Profits surged with natural gas
prices, as electric-utility customers
used more gas to generate electricity
for the summer season. March-quarter
earnings per share grew to $0.96 from
a loss of $0.04 a year ago. Analysts
predict Apache will double profits
this year.
BIGGEST $ $ LOSS
LOSERS (IN MILLIONS) % LOSS REASON FOR MOVE
------ ------------ ------ ---------------
Motorola, Inc. $8.5 -38.7 The company beat March-quarter
expectations as strong demand for its
wireless network equipment drove 111
percent earnings growth, but Motorola
warned June-quarter earnings would
fall short of forecasts amid lower
phone prices and higher costs for
parts.
Atmel Corp. $8.0 -28.6 Despite topping estimates, the stock
fell on capacity concerns as demand
for Atmel's flash memory outstripped
supply. Earnings jumped 375 percent
to $0.19 in the March quarter, and
analysts forecast 238 percent growth
for the June quarter.
LSI Logic Corp. $5.6 -25.5 Profit taking following a substantial
run-up caused the stock to retrace.
Strong demand for LSI's application-
specific integrated circuits, used in
broadband, data networking, wireless
and set-top box applications, helped
the company earn $0.26 per share
versus $0.04 a year ago.
Amkor
Technology, Inc. $4.4 -41.1 Semiconductor packaging and test
service provider warned June-quarter
revenue and earnings per share would
not meet expectations because of a
production shift for a major
customer, tight semiconductor wafer
supply and manufacturing problems in
the Philippines. The company beat
March-quarter expectations by 17
percent by more than doubling
earnings from a year ago.
Parametric
Technology, Corp. $4.3 -51.8 Total revenues were revised downward
by 15 percent. The company's sales
force failed to close several large
deals for its Windchill software,
which links designers and engineers
with manufacturing departments,
suppliers and customers over the
Internet.
All gains/losses are calculated on an average cost basis
BRANDYWINE BLUE FUND, INC.
STATEMENT OF NET ASSETS
June 30, 2000
(Unaudited)
QUOTED
MARKET
SHARES COST VALUE (B)<F6>
------ ---- -------------
COMMON STOCKS - 95.8% (A)<F5>
APPAREL & SHOE RETAILER - 1.1%
260,000 Intimate Brands, Inc. $ 5,343,777 $ 5,135,000
THIS SECTOR IS 3.9% BELOW YOUR FUND'S COST.
COMMUNICATIONS EQUIPMENT - 7.9%
200,100 Nortel Networks Corp. 3,273,646 13,656,825
25,000 Scientific-Atlanta, Inc. 1,799,042 1,862,500
300,000 Tellabs, Inc. 16,174,894 20,531,250
------------ ------------
21,247,582 36,050,575
THIS SECTOR IS 69.7% ABOVE YOUR FUND'S COST.
COMMUNICATIONS SERVICES - 0.9%
45,400 Ditech Communications Corp. 4,645,323 4,293,137
THIS SECTOR IS 7.6% BELOW YOUR FUND'S COST.
COMPUTER RELATED - 5.9%
208,600 Apple Computer, Inc. 5,015,586 10,925,425
350,000 Compaq Computer Corp. 10,443,661 8,946,875
127,800 Microchip Technology, Inc. 3,637,837 7,446,344
------------ ------------
19,097,084 27,318,644
THIS SECTOR IS 43.1% ABOVE YOUR FUND'S COST.
ELECTRONICS - 12.0%
5,700 Amkor Technology, Inc. 124,748 201,281
100,000 Amphenol Corp. 5,372,368 6,618,750
172,000 Celestica Inc. 8,399,297 8,535,500
175,000 Flextronics International Ltd. 9,866,644 12,020,313
90,000 KEMET Corp. 2,070,000 2,255,625
73,875 Molex Inc. 2,247,969 2,585,625
100,000 Sanmina Corp. 6,006,453 8,550,000
140,000 SCG Holding Corp. 2,553,700 3,062,500
60,000 Taiwan Semiconductor
Manufacturing Company Ltd. 2,175,321 2,328,750
100,000 Tektronix, Inc. 6,447,709 7,400,000
100,000 Viasystems Group, Inc. 1,671,356 1,618,750
------------ ------------
46,935,565 55,177,094
THIS SECTOR IS 17.6% ABOVE YOUR FUND'S COST.
FINANCIAL/BUSINESS SERVICES - 2.7%
165,000 Acxiom Corp. 4,288,124 4,496,250
47,000 Concord EFS, Inc. 1,242,194 1,222,000
73,500 Providian Financial Corp. 5,269,564 6,615,000
------------ ------------
10,799,882 12,333,250
THIS SECTOR IS 14.2% ABOVE YOUR FUND'S COST.
FOOD/RESTAURANTS - 2.1%
150,000 Darden Restaurants, Inc. 2,790,880 2,437,500
116,300 Outback Steakhouse, Inc. 3,502,064 3,401,775
203,500 Wendy's International, Inc. 3,745,672 3,624,844
------------ ------------
10,038,616 9,464,119
THIS SECTOR IS 5.7% BELOW YOUR FUND'S COST.
LEISURE & ENTERTAINMENT - 1.5%
210,000 Starwood Hotels & Resorts
Worldwide, Inc. 5,958,354 6,838,125
THIS SECTOR IS 14.8% ABOVE YOUR FUND'S COST.
MACHINERY & MISCELLANEOUS MANUFACTURING - 6.7%
225,000 Dover Corp. 10,677,603 9,126,562
452,000 Tyco International Ltd. 17,297,722 21,413,500
------------ ------------
27,975,325 30,540,062
THIS SECTOR IS 9.2% ABOVE YOUR FUND'S COST.
MEDICAL RELATED - 3.4%
135,000 St. Jude Medical, Inc. 5,525,719 6,193,125
107,900 UnitedHealth Group Inc. 7,985,631 9,252,425
------------ ------------
13,511,350 15,445,550
THIS SECTOR IS 14.3% ABOVE YOUR FUND'S COST.
NETWORKING - 0.3%
78,600 Network Associates, Inc. 2,584,713 1,601,475
THIS SECTOR IS 38.0% BELOW YOUR FUND'S COST.
OIL/GAS EXPLORATION & PRODUCTION - 10.1%
148,000 Apache Corp. 7,043,013 8,704,250
110,000 Devon Energy Corp. 5,185,427 6,180,625
78,885 Dynegy Inc. 2,502,143 5,388,832
150,000 El Paso Energy Corp. 6,508,948 7,640,625
130,000 EOG Resources, Inc. 3,012,452 4,355,000
109,000 Kerr-McGee Corp. 6,509,262 6,424,187
350,000 Union Pacific Resources Group Inc. 7,253,036 7,700,000
------------ ------------
38,014,281 46,393,519
THIS SECTOR IS 22.0% ABOVE YOUR FUND'S COST.
OIL/GAS FIELD SERVICES - 9.1%
180,000 ENSCO International Inc. 6,492,442 6,446,250
290,000 Grant Prideco, Inc. 5,809,035 7,250,000
300,000 R&B Falcon Corp. 7,022,713 7,068,750
180,000 Rowan Companies, Inc. 5,332,471 5,467,500
75,000 Santa Fe International Corp. 2,669,977 2,620,312
150,000 Transocean Sedco Forex, Inc. 7,927,778 8,015,625
125,000 Weatherford International, Inc. 4,971,019 4,976,563
------------ ------------
40,225,435 41,845,000
THIS SECTOR IS 4.0% ABOVE YOUR FUND'S COST.
PHARMACEUTICALS - 1.0%
168,400 ICN Pharmaceuticals, Inc. 4,906,969 4,683,625
THIS SECTOR IS 4.6% BELOW YOUR FUND'S COST.
SEMICONDUCTOR MANUFACTURING - 14.7%
354,200 Advanced Micro Devices, Inc. 10,772,720 27,361,950
192,500 Cypress Semiconductor Corp. 4,962,779 8,133,125
135,000 Fairchild Semiconductor Corp. 4,514,062 5,467,500
129,900 Lattice Semiconductor Corp. 7,096,830 8,979,338
310,000 National Semiconductor Corp. 11,228,542 17,592,500
------------ ------------
38,574,933 67,534,413
THIS SECTOR IS 75.1% ABOVE YOUR FUND'S COST.
SEMICONDUCTOR RELATED - 10.1%
544,000 Atmel Corp. 9,192,330 20,060,000
44,800 Dallas Semiconductor Corp. 1,579,653 1,825,600
55,000 Intersil Holding Corp. 2,288,957 2,973,437
135,000 Lam Research Corp. 6,336,295 5,062,500
300,300 LSI Logic Corp. 6,677,969 16,253,738
------------ ------------
26,075,204 46,175,275
THIS SECTOR IS 77.1% ABOVE YOUR FUND'S COST.
SOFTWARE - 0.2%
44,800 Sybase, Inc. 1,072,881 1,030,400
THIS SECTOR IS 4.0% BELOW YOUR FUND'S COST.
SPECIALTY RETAILING - 6.1%
170,000 BJ's Wholesale Club, Inc. 5,156,388 5,610,000
160,000 Ingram Micro Inc. 3,015,726 2,790,000
340,000 RadioShack Corp. 16,853,865 16,107,500
80,000 Tech Data Corp. 3,200,205 3,485,000
------------ ------------
28,226,184 27,992,500
THIS SECTOR IS 0.8% BELOW YOUR FUND'S COST.
------------ ------------
Total common stocks 345,233,458 439,851,763
SHORT-TERM INVESTMENTS - 3.3%(A)<F5>
COMMERCIAL PAPER - 2.2%
$5,000,000 Prudential Funding Corp.,
due 07/03/00, discount of 6.875% 4,998,090 4,998,090
5,000,000 Goldman Sachs Group LP,
due 07/07/00, discount of 6.75% 4,994,375 4,994,375
------------ ------------
Total commercial paper 9,992,465 9,992,465
VARIABLE RATE DEMAND NOTE - 1.1%
5,119,267 Firstar Bank U.S.A., N.A. 5,119,267 5,119,267
------------ ------------
Total short-term investments 15,111,732 15,111,732
------------ ------------
Total investments $360,345,190 454,963,495
------------
------------
Cash and receivables, less
liabilities 0.9% (A)<F5> 3,947,440
------------
NET ASSETS $458,910,935
------------
------------
Net Asset Value Per Share
($0.01 par value 100,000,000
shares authorized), offering
and redemption price
($458,910,935 / 11,788,187
shares outstanding) $38.93
------------
------------
(a)<F5> Percentages for the various classifications relate to net assets.
(b)<F6> Each security, excluding short-term investments, is valued at the last
sale price reported by the principal security exchange on which the
issue is traded, or if no sale is reported, the latest bid price.
Securities which are traded over-the-counter are valued at the latest
bid price. Short-term investments are valued at amortized cost which
approximates quoted market value.
CAPITAL GAINS UPDATE . . .
As of quarter end, Brandywine Fund achieved approximately $12.10 per share of
gains to be distributed to shareholders of record as of October 26, reflecting
one of your more successful years. Short-term gains equal $5.00 and long-term
gains $7.10. Brandywine Blue has approximately $7.50, with $2.95 in short-term
and $4.55 in long-term gains.
Major individual gainers to date included long-term holdings like Gemstar and
Nokia. You recently realized a $304 million gain when you sold Nokia at $55, a
446 percent increase over cost. The stock later hit $46. When you sold Burr-
Brown, a short-term holding, two weeks ago at $102, you realized a $21 million
gain, representing a 335 percent increase over cost. The stock subsequently hit
$80.
While we don't allow the tax tail to wag the investment dog, we emphasize
that the amount you pay in tax following this distribution lessens the tax you
will have to pay when you eventually redeem your shares.
It's important to remember that this is an estimate based on the current
--------
status as of June 30. The final numbers, including gains and losses yet to be
realized in the next quarter, may be higher or lower but will not be available
until after the fiscal year ends on September 30, 2000. We will publish those
numbers in the annual report, which you will receive early in October. Please
call (800) 656-3017 or visit www.brandywinefunds.com for interim updates if you
need them for planning purposes.
KUDOS FOR YOUR FUND . . .
FORBES -- Brandywine listed among a dozen funds as "Outsiders with Winning
Ways" for posting superior returns in the 1990s - 20 percent annualized -
without mimicking the S&P 500. February 2000
-------------
BLOOMBERG -- "Brandywine Fund's Friess' not Fretting Tech Rout. Brandywine Fund
is beating 98 percent of funds tracked by Bloomberg this year . . . Friess'
focus on solid companies with a track record of earning money has put his
returns back in the black." April 26, 2000
--------------
THESTREET.COM -- " . . . Brandywine is back on top and, once again, it is doing
it with excellent stock picking . . . The fund probably has the clearest bunch
of minds going right now in mutual fund-dom."
April 28, 2000
--------------
MONEY -- Brandywine named to the Money 100, "the best mutual funds you can buy"
for the third straight year. June 2000
---------
MUTUAL FUNDS MAGAZINE -- Brandywine awarded the highest 5-star rating.
"Brandywine deserves some new respect. Fund managers rewarded the faithful with
a 54% gain in 1999, which whipped the returns of the average growth fund and the
S&P 500." August 2000
-----------
BOARD OF DIRECTORS
John E. Burris
Chairman
Burris Foods, Inc.
Milford, Delaware
Foster S. Friess
President
Friess Associates, Inc.
Jackson, Wyoming
Stig Ramel
Former President
Nobel Foundation
Stockholm, Sweden
Marvin N. Schoenhals
Chairman
WSFS Financial Corp.
Wilmington, Delaware
P.O. Box 4166, Greenville, DE 19807
(800) 656-3017
www.brandywinefunds.com
[email protected]
Investment Adviser: FRIESS ASSOCIATES, INC.
Custodian: FIRSTAR BANK, NA
Transfer Agent: FIRSTAR MUTUAL FUND SERVICES, LLC
Independent Accountants: PRICEWATERHOUSECOOPERS LLP
Legal Counsel: FOLEY & LARDNER
OFFICERS: Foster S. Friess, President and Treasurer; Lynda Campbell, Vice
President and Secretary; William D'Alonzo, Vice President; Carl Gates, Vice
President; John Ragard, Vice President; and Paul Robinson, Vice President
Report Editor: Rebecca Buswell
Report Staff: Chris Aregood, Chris Long, Adam Rieger
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of either Brandywine Fund or Brandywine Blue Fund unless
accompanied or preceded by the Funds' current prospectus. Past performance is
not indicative of future performance. Investment return and principal value of
an investment may fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
